Weighing Merits of Loan Deferments Today to Keep Defaults Away

By

AnnaMaria Andriotis

March 11, 2013 7:25 p.m. ET

To lower their number of student-loan defaults, colleges are embracing a controversial tactic: Encouraging borrowers to put off payments.

A growing number of nonprofit colleges are hiring companies that specialize in "default management" to reach out to former students who are behind on federal loan payments. These firms often recommend postponing payments through either deferment or forbearance.